Skylight Closes $130M Multifamily Acquisition in Edgewater, NJ
The deal marks the firm’s second purchase in the town.
Skylight Real Estate Partners has closed its second transaction in Edgewater, N.J., Commercial Observer can first report.
The firm has partnered with PCCP to acquire Riello, a 20-story apartment building at 99 Gorge Road, for $130 million. Institutional investors advised by J.P. Morgan Asset Management provided $112 million in acquisition financing for the deal.
The transaction, which closed March 24, is Skylight’s second in the town. Following the company’s formation last year, it made its market debut with the purchase of Infinity Edgewater, a 100-unit rental property, in November.
“We are continuing to assemble an attractive portfolio of value-add, multifamily properties in our core markets,” Andrew Miller, a founding partner at Skylight Real Estate Partners, said. “With our long-standing relationships with partners like PCCP, and our current development pipeline, we believe we are well-positioned for continued growth and expansion in 2022.”
Sitting in an easily accessible, prime location in Edgewater, Riello features views of the Hudson River as well as the New York City skyline. The property comprises 226 one-, two-, and three-bedroom units, while building amenities include an outdoor swimming pool, a fitness center, a sauna and a steam room, a pet run and a barbecue area.
In between the two Edgewater, N.J., deals, Skylight made another acquisition, this time in the Edgewater neighborhood of Miami. “We’re only buying in Edgewaters!” Miller joked in an interview with CO earlier this year.
In the same interview, Miller described Skylight’s first Edgewater, N.J., deal on its own merits, but said the draw to the town was also a New York recovery bet for the firm: “When the office buildings fill back up, on the West Side of Manhattan and throughout the borough, people are going to need a place to live,” he said.
“We’ve been tracking Edgewater, N.J. for a long time,” he said this week. “There’s a major disconnect between supply and demand. It’s a very supply-constrained market, and those who have developed in Edgewater historically had very tight ties to the town, so it’s difficult to break in and to own a piece of it. The accessibility into New York City is amazing through the Edgewater Ferry and the Weehawken Ferry, which are both under 10 minutes away from the property, and also get you into Manhattan in about 10 minutes. You’re then five minutes from Hudson Yards. So, it was a complete play off of the West Side and Hudson Yards.”
Miller went on to say he believes that supply-constrained markets along New Jersey’s Gold Coast, such as Hoboken and Edgewater, will experience outsized rent growth.
With the Riello acquisition now sealed, Skylight and PCCP plan on implementing a substantial value-add program at the property, which was built back in 2004. The new ownership is planning a full renovation that includes brand-new building amenities.
As the town’s name suggests, Riello sits close to the water’s edge, almost on a cliff. “So, it has unobstructed views of the water, starting at the lobby, all the way up the tower,” Miller said. “It’s a pretty unique asset. In order to build it, there was a lot of work that went into blasting rock and — based on where construction costs are today — to recreate this would be very challenging. So we feel like we’re buying it below replacement cost, and there’s a tremendous opportunity to upgrade the building.”
“We are pleased to expand our relationship with Skylight Real Estate Partners through the acquisition of Riello,” Brian Haber, a senior vice president at PCCP, said in a statement. “This deal reflects our continued confidence in the Edgewater area, which remains a strong market with increasing demand.”
A JLL (JLL) Capital Markets investment sales and advisory team led by Jose Cruz, Michael Oliver, J.B. Bruno, Steve Simonelli, Kevin O’Hearn and Mark Belenky represented Skylight and PCCP, as well as the property’s seller, Barings. JLL’s Michael Klein, Matthew Pizzolato, Gerard Quinn and Jake Moore negotiated the acquisition financing.
“We were excited to be a part of this one and help the Skylight Real Estate Partners and PCCP team continue to expand their portfolio in this area,” Pizzolato said. “This deal received tremendous interest from the lending community given the institutional sponsorship and their knowledge and proven track record to execute on this asset type in this submarket.”
Cathy Cunningham can be reached at firstname.lastname@example.org